Russia has shown no interest in rapprochement with Europe

Russia is keen on developing stronger ties with both China and the EU in order to secure its global economic position. The recent agreement with China to begin Ruble-Renminbi trading in Russia is part of this effort. Last week, Marc Chandler also wrote about the increasing likelihood of Russia’s admission into the WTO framework. But clearly rapprochement with the European Union is central to Russia’s plans going forward. For Europe to turn toward the Russians, in part, this means it needs to turn away from the United States. And Vladimir Putin has been very vocal about this, calling dollar hegemony ‘dangerous’ while in Germany courting the EU last month.

Russia’s advances are being met with some scepticism.

Andy Lees writes:

Before arriving in Germany at the end of November, Russian prime minister Putin published an article in the German newspaper Suddeutsche Zeitung arguing that Russia and Europe need to work more closely together. “We propose the creation of a harmonious economic community stretching from Lisbon to Vladivostok”. He said “in the future we could even consider a free trade zone or even more advanced forms of integration”. He called for “active exchanges” in energy, working together “at all phases of the technological value creation chain from the uncovering of demand for energy resources up to the delivery to the consumer”. He also wants trade between the two blocs to be denominated in euros or rubles rather than dollars. Historically Putin has talked about forming the equivalent of the European Coal and Steal Community (the forerunner to the European Community) in energy. Markus Loening, head of human rights in the German government however has said that the latest trial of former oil magnate Mikhail Khodorkovsky “is a political trial” and German parliament speaker Norbert Lament however says that the trial indicates “Russia and its government have shown no interest in a rapprochement with Europe”, effectively linking any real development to the freeing of Khodorkovsky.

Europe’s problem with Russia has much to do with the lawless mafia/government linkages the WikiLeaks cables revealed. The Europeans do not want to hitch their wagon to a horse that could go starkers and break loose at any moment. Witness the recurring Ukrainian-Russian gas disputes that have held Europe hostage time and again. If Russia wants to court the EU, it needs to show that the Russian bureaucracy and courts respect the rule of law.

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

Well just to start with, your headline is contradicted by the fourth sentence in your first paragraph.

Second, the assertion that Europe must choose between Russia and the US is not supported. If the EU grants visa-free travel to Russians (as they have already done for e.g. Serbs) would this be turning away from the US? It’s confusing.

If Russia were an unreliable provider of gas it’s hard to understand why they would be spending billions of dollars to run a pipeline along the bottom of the Baltic. Would that be so that they could then let the pipeline sit empty?

If Russia is run by a lawless mafia/government, how does not getting any money for their gas fit into that context? Are most Mafiosi interested in getting cash, or husbanding natural gas reserves? If the latter, they would be very odd Mafiosi indeed.

Russia’s respecting the rule of law is a problem, but not for its relations with the EU. Note that respect for rule of law rarely features in France’s relations with its African colonies, or Italy’s relations with Libya. National interest is usually the overriding concern.

As for Khodorkovsky, he’s never getting out of jail and the Germans know this. Worrying about Khodorkovsky is best left to warmongering neocons in DC. That he was prosecuted for tax evasion instead of his contract killings creates a PR problem, but I seriously doubt it presents a problem for Russia-German relations.

If the Europeans thought Russia was a runaway horse to which they did not want to be hitched – they should have thought of that 30 years ago when the first gas pipelines were laid from Yamal to West Germany. If they think that Russia is a “runaway horse,” however, not to worry! They can ask Moammar Gaddhafi to supply them gas instead.

Matt Stiles says 9 years ago

I’m of the belief that Western countries of Europe and North America share more in common with Russia than they do with many of their current “allies”. There has been tremendous progress between Russia and the US – especially considering most of the current foreign diplomats of both countries grew up during the cold war. As that wears off, rapprochement will only be a matter of time.